In recent years, the net operating loss (NOL) deduction for businesses has seen several important changes. Since 2021, NOLs can’t be carried back, but unused losses can be carried forward indefinitely (with some exceptions for farm businesses). However, they’re now subject to an 80% of taxpayer income limitation. The 80% standard extends to NOLs generated after 2017. If your business isn’t able to take full advantage of an NOL carryforward in 2023, you might want to consider shifting income and deductions into 2024. Such a move potentially could help you avoid higher tax rates on the accelerated income. Contact us for help with business tax deductions.
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